Advancing from Technology Verification to Mass Production and Scale, Striving for Commercial Closure.

A few days ago, SpaceX completed the largest IPO in human history, with a market cap exceeding $2.5 trillion (covering three major sectors: Space, Connectivity, and Artificial Intelligence), once surpassing Microsoft. A company that once vowed not to go public until reaching Mars has now entered the capital market. In a sense, this marks the moment when global commercial space, as a business, is officially being priced.

Domestically, commercial space has become one of the hottest sectors over the past two to three years, driven by the convergence of policy, technology, and capital.

On one hand, the commercial space sector has transitioned from a "future industry" to a key pillar of becoming a "space power," with dense (intensive) reusable rocket test flights. The industry expects breakthroughs in reusable technology this year. In the capital market, the sector raised RMB 18.6 billion in 2025, with over 600 companies entering the field, and over a hundred stocks doubling in value within a year...

Amidst the hype, industry insiders predict that 2026 will mark the transition of the commercial space sector from technological exploration to mass production and scale. This means achieving commercial closure becomes a critical challenge at this stage. "If it doesn't achieve commercial closure, it can't be called commercial space," noted a senior commercial space industry figure.

Industry observations reveal that around industrial scale, the rocket sector, the most closely watched area this year, is intensively verifying reusable technology to reduce costs. Meanwhile, some supporting players are quietly making profits.

01

A Trend Driven by Triple Forces

In the commercial space sector, Elon Musk and SpaceX are unavoidable names.

"This industry is very similar to new energy vehicles," compared a founder of a space intelligence computing company, Space Wis. Just as Tesla transformed the automotive industry, Musk's entry into the space sector has brought significant changes through supply chain integration, user scenarios, and brand building.

The most impactful demonstration occurred in 2015. At the end of that year, the first stage of a Falcon 9 rocket landed steadily back on Earth after launch, and a few months later, achieved sea-based recovery. The entire industry saw that an orbital rocket could be recovered and reused.

The industry believes that aerospace products have thus transitioned from cost-no-object national projects to industrial products that can be manufactured in small batches, at low cost, and iteratively.

China's commercial space industry is also widely recognized to have started in that year. China explicitly encouraged and guided private capital into the space sector for the first time, and the first batch of private rocket and satellite companies was established in the following two to three years.

The accelerator was pressed between 2022 and 2023.

While Musk drove down launch costs, he also created a massive space communication services market requiring enormous rocket capacity through Starlink.

In the first quarter of 2023, SpaceX achieved revenues of approximately $1.5 billion and total profits of $55 million, marking its first large-scale profitability, driven by Starlink. The commercial logic, reusable low-cost capacity, and the resulting communication market demand allowed commercial space to see, for the first time, a closed loop from technology verification to commercial realization.

Around 2022, Starlink's significant influence in geopolitics and major power rivalries also shifted the narrative of commercial space from a purely commercial industry to one closely tied to national security. Additionally, with limited orbital and spectrum resources for low-Earth orbit satellites and a first-come, first-served principle, China's top-level design has repeatedly upgraded the positioning of commercial space.

At the end of 2023, the Central Economic Work Conference explicitly proposed, for the first time, to develop several strategic emerging industries, including commercial space. In March 2024, it was listed as a new growth engine in the government work report for the first time. After the Fourth Plenary Session at the end of last year, commercial space was included as a key pillar of becoming a space power, alongside quality, cyber, and information power.

An investor believes that the proposal of becoming a space power and the announcement of lunar exploration and space manufacturing plans have shown the investment community a vision of "where humanity is headed next," which has been highly impactful.

In three years, the top-level attention has escalated, followed by a series of regulatory relaxations.

In November last year, the China National Space Administration (CNSA) issued the Action Plan for Promoting High-Quality and Safe Development of Commercial Space (2025-2027), explicitly allowing private companies to independently apply for frequency and orbital resources and undertake national space missions for the first time. Meanwhile, the requirement for a weapons research and production license for commercial satellite development was removed, and the newly established Commercial Space Department significantly shortened approval times. Additionally, the STAR Market opened to commercial space companies that have not yet achieved profitability but possess core technologies.

As a result, substantial capital has poured into commercial space. At the end of last year, the CNSA established the first phase of the RMB 20 billion National Commercial Space Development Fund. At the local level, Hainan Province initiated two space industry funds with a target size of RMB 4 billion, and Jiuquan City established a RMB 500 million space industry investment fund... According to the China Commercial Space Industry Development Report (2025), total industry financing reached RMB 18.6 billion last year, a 32% year-on-year increase.

Driven by the demonstration effect (demonstration effect), policy encouragement, and capital inflow, the commercial space sector is developing rapidly.

However, there is also consensus in the industry that for domestic commercial space to truly take off, beyond external catalysts, achieving internal commercial closure remains to be accomplished.

Cao Meng, Senior Vice President and Chief Engineer of Space Will, recently mentioned in a podcast that at a China Space Day industry chain roundtable this year, representatives from components, ground control, rockets, and satellites took turns discussing their challenges. He concluded that the crux lies in insufficient scale, leading to various issues across the supply chain.

This is also a consensus in the industry—rockets rely on scaled launches to reduce costs, which in turn depend on downstream demand, which requires sufficient on-orbit satellites (i.e., sufficient capacity) to be activated.

Currently, both the number of domestic on-orbit constellations and launch frequencies need to be scaled up.

China's two major low-Earth orbit constellations—the GW constellation under China StarNet and the Qianfan constellation under Shanghai Yuanxin—have a combined total of over 30,000 satellites declared to the International Telecommunication Union (ITU), but less than 10% have been networked. In contrast, the overseas Starlink, which has achieved large-scale operations, has over 12,400 on-orbit satellites.

The same applies to launch frequencies. Last year, China completed 92 launches, already a high-density period for Chinese space, but SpaceX conducted 170 launches.

This makes rockets, which carry capacity, the hottest link in the entire industrial chain. They are expected to unlock scaling bottlenecks and are currently the focus of capital, regulators, and public attention.

02

Rockets in the Spotlight: Reusability as the Ticket to Going Public

A RMB 616 million rocket launch order in 2025 became an awkward footnote to the current bottleneck in China's commercial space development.

The bidder was Shanghai Yuanxin Satellite, aiming to procure rocket capacity for the large-scale networking of the Qianfan constellation. However, from February to August, the order repeatedly went to tender and repeatedly failed due to insufficient qualified bidders (fewer than three) to proceed.

This industry episode has laid bare the capacity bottleneck in commercial space rockets and the insufficient number of private rocket companies capable of stably providing large-capacity launch services.

The bottleneck in the industrial chain has naturally become the focus of capital attention.

Currently, leading private commercial rocket companies such as LandSpace, Space Pioneer, CAS Space, i-Space, and Galactic Energy have all initiated IPOs, with a total valuation exceeding RMB 100 billion. Among them, LandSpace is the fastest, with its STAR Market IPO application accepted on December 31, 2025, planning to raise RMB 7.5 billion explicitly for reusable rocket technology and capacity enhancement. It entered the listing inquiry phase in just 22 days.

Some have aptly compared rockets to a capacity business, earning revenue from transporting cargo to specific orbits. The high cost of capacity stems largely from the fact that rockets have long been disposable, making it difficult to amortize costs.

SpaceX has significantly reduced aerospace launch costs through reusability, from a historical average of approximately $18,500 per kilogram to about $2,700 (Falcon 9) and $1,400 (Falcon Heavy). Currently, China is still catching up in this metric.

Wei Yi, Chairman of Hangzhou Arrow Yuan Aerospace Technology Co., Ltd., mentioned a few months ago that domestic commercial space launch payload prices are approximately RMB 80,000 to 100,000 per kilogram. If rockets can be recovered and reused, assuming 20 reuses, the cost per launch can drop by nearly 70%.

In terms of capacity, data shows that the Falcon 9, in reusable mode, has a sun-synchronous orbit capacity exceeding 15 tons, while the domestically commercialized private rocket with the highest capacity, the "Gravity-1" by Oriental Space, has a 500-kilometer sun-synchronous orbit capacity of 4.2 tons.

Given this gap, domestic commercial space leaders have heavily invested in the development of large-tonnage and reusable liquid rockets.

From last year to this year, around reusable technology, domestic players have initiated high-density verifications, with this year being a critical verification node.

In late this month, the Zhuque-3 will attempt first-stage recovery again, aiming to achieve recovery and reuse flights in the fourth quarter, making it the current leader among private companies. New models from i-Space, Deep Blue Aerospace, Space Pioneer, Galactic Energy, and CAS Space will also have their maiden flights or synchronous verification of reusable technology this year, while the national team's Long March 10B and 12B are also scheduled for recovery verification.

The industry is closely watching each company's launch progress. An industry insider told Digitimes that among the current wave of private listings, whoever first achieves reusable technology will secure the fastest ticket to going public.

This is no exaggeration. Regulators have linked reusability to the entry ticket for rocket companies to go public. On December 26, 2025, the Shanghai Stock Exchange issued guidelines for applying the fifth listing standard on the STAR Market, explicitly stating that the staged achievement required for commercial rocket companies to apply is "the first successful orbital launch of a medium-to-large launch vehicle using reusable technology."

This means that technological breakthroughs are becoming key to capital positioning.

However, some senior figures believe that the core challenge for rockets is to solve the problem of low-cost, large-capacity transportation, with reusability being just one path to cost reduction.

Cao Meng, Chief Engineer of Space Will, previously mentioned that reusable technology aims to reduce single-launch costs through reuse, but it comes with trade-offs, such as sacrificing payload capacity.

The Falcon 9's near-Earth orbit capacity is 20 tons in expendable mode, but if first-stage recovery on a drone ship is required, its capacity may drop to 15-10 tons, and if the first stage returns to a landing site, the capacity is less than 10 tons. It also increases the program cost per rocket, as the rocket must not only deliver its payload but also reserve energy for the return flight.

Domestically, some manufacturers are focusing on increasing capacity and reducing costs, with reusability as a later priority. For example, Yang Haoliang, Commander of the Lijian-2 at CAS Space, mentioned in March this year that the Lijian-2 introduces automotive automated production lines and modular development, significantly reducing manufacturing and production costs, with a non-recoverable unit cost of RMB 30,000 per kilogram.

Regardless of the technical route chosen, an undeniable fact is that the currently hot rocket sector is still in a heavy investment phase, with profitability remaining a long-term goal.

03

Exploring Closure and Early Monetization

While capital and lenses are focused on rockets, it must be noted that commercial space is a broad sector.

Currently, the industry generally divides the commercial space industrial chain into three layers: upstream, midstream, and downstream.

A report by China Merchants Securities points out that the upstream of the commercial space industrial chain refers to satellite and rocket manufacturing and related supporting equipment; the midstream includes rocket launches and ground equipment manufacturing; the downstream encompasses terminal applications and service markets, with traditional application scenarios including communications, navigation, and remote sensing, and emerging scenarios including satellite internet, space travel, space mining, and deep-space exploration.

China Merchants Industry Research Institute estimates that China's commercial space industry will reach approximately RMB 2.5-2.8 trillion in 2025, with a compound annual growth rate of over 20%, and the number of related companies in the industrial chain will increase to over 600. This scale includes the output value of all upstream and downstream industries and their spillover effects.

Multiple investment research institutions believe that from a global space economy perspective, rocket launch services will account for only about 2% of the entire space economy in the future, with downstream applications and services accounting for over 70%.

Science communicator Shou Tuo recently mentioned in a podcast that rockets are infrastructure, not commercial space itself; payloads are the more commercial aspect.

Taking SpaceX as an example, the Starlink satellite communication service is currently the primary revenue generator. In 2025, Starlink brought in over $11.3 billion in revenue and $4.4 billion in operating profit for SpaceX, being the only profitable segment of the company.

Currently, as domestic on-orbit constellations and launch frequencies are still awaiting large-scale development, the commercial closure of remote sensing, satellite internet, and other user-centric segments is still being explored.

The biggest challenge in this segment is finding large-scale, genuine commercial scenarios and orders. This can be seen from the example of Planet Labs, a global remote sensing leader. Planet Labs has hundreds of on-orbit satellites and has invested over a decade, hoping to sell data to folk (private) commercial applications such as agriculture, commodity trading, and carbon neutrality tracking.

Due to the high depreciation rate of satellites and the extremely low willingness and ability to pay for private commercial applications, coupled with fragmented scenarios, the company only reached an adjusted breakeven point in the fourth quarter of fiscal year 2025.

Industry observations reveal that currently, companies achieving commercial realization are either in the "shovel-selling" segment or have found certainty by exploring overseas markets.

Since last year, suppliers in various upstream segments of the commercial space sector, such as metal 3D printing, cryogenic equipment, and special braking systems, have emerged with "shovel-selling" narratives.

For example, Xi'an BLT, a metal 3D printing manufacturer, has assisted multiple commercial space clients, including LandSpace, Oriental Space, Jiuzhou Yunjian, i-Space, Space In, and Tianhui Aerospace, in completing launch and flight missions, with multiple projects entering mass production. In 2025, it achieved revenue of RMB 1.863 billion and net profit of RMB 209 million, doubling year-on-year.

However, it is worth noting that the "commercial space" segment has not yet become a major revenue contributor for these companies.

In early January this year, BLT's stock price surged by over 30% over multiple days due to the commercial space concept, triggering abnormal stock fluctuations. The company subsequently issued a clarification announcement: As of September 30, 2025, the commercial space business accounted for only about 3% of the company's total revenue, and it straightforward words (bluntly stated) that its contribution to total revenue would remain limited in the coming years.

Besides BLT, Chaojie Co., Ltd., hailed by the market as a core supplier of rocket structural components, announced in late December last year that its commercial space business accounted for about 5% of total revenue, still in small-batch deliveries with minimal impact on overall performance. Meanwhile, in the entire commercial space concept sector, no upstream supplier can separately list commercial space revenue as accounting for more than 10% of their total revenue.

This indicates that in the commercial space sector, which is still in its early stages of development, the downstream market remains nascent. The logic of "selling shovels is the most profitable," as validated in the AI large model sector, currently finds it difficult to support the overall performance of the upstream in the commercial space industry.

Beyond selling shovels and building rockets, some players are attempting to forge a unique path by leveraging differentiation to establish a closed-loop business model.

Hangzhou-based Spacety does not build rockets; instead, it packages AI satellites along with ground stations, personnel training, and on-orbit computing power sharing into a "turnkey" solution for sale overseas.

After delivering its first satellite to Oman in November 2024, the two parties signed a new multi-satellite cooperation agreement. Currently, Spacety is one of the few private enterprises in China that has completed the export of intelligent satellites and supporting industrial chain.

Song Bingchen, co-founder of Spacety, told Shuzhi Qianxian that the model of exporting national-level space capabilities to countries that need to uphold their sovereign dignity but lack independent space capabilities has proven viable. Currently, approximately 40 countries worldwide have an annual space cooperation budget of around USD 100 million, indicating immense market potential. Spacety plans to break through and establish cooperation with these countries one by one.

Bu Zhiyong, founder of Shanghai Highfly, believes that China's commercial space industry is transitioning from Phase 1.0 of technological reserve to Phase 2.0 of mass-scale construction. In Phase 2.0, achieving a commercial closed loop is essential. It's not just about selling satellites; it's about realizing stable profits at the application end. Only in this way can the commercial space industry achieve a positive cycle.

SpaceX took 20 years to achieve a commercial closed loop for Starlink, yet its overall business model remains to be fully validated. For China's domestic commercial space industry, the entire sector needs time to await its own "Starlink moment." (